Pre-recorded, or “canned” laughter is often used to encourage audience laughter. Previous research suggests that hearing others laugh can influence an audience, although several variables moderate its effects. We examined an unexplored moderator, hypothesizing that canned laughter would influence listeners only if they believed the laughter came from fellow in-group members. We manipulated the presence or absence of canned laughter in a potentially humorous recording and participants’ beliefs about the in-group or out-group composition of the laughing audience. The results confirmed our hypothesis: participants laughed and smiled more, laughed longer, and rated humorous material more favorably when they heard in-group laughter rather than out-group laughter or no laughter at all.